Marketing Segmentation, Targeting and Positioning market segmentation What is market segmentation? explain its nature/features. Explain the importance/advantages/need for market segmentation? Briefly describe the bases of market segmentation. What is niche marketing? Explain its advantages to marketers and to customers. Meaning of Marketing Segmentation Dividing the total market into different parts/segments on certain bases & exploiting each segment fully for the purpose of marketing & sales promotion. Market segmentation is a new customer-oriented philosophy and is consistent with modern marketing concept which is consumer-oriented. Market Markets consists of buyers & buyers differ in one or more respects. They differ in their wants, resources, geographical locations, buying attitudes and buying practices. Any of these variables can be used to segment a market. Definitions Philip Kotler : The act of dividing a market into distinct groups of buyers who might require separate products and/or marketing mixes. William J.Stanton : Market segmentation is the process of dividing the total heterogeneous market for a good or service into several segments, each of which tends to be homogeneous in all significant aspects. John Frain : The philosophy of directing products and services of specific target groups is termed marketing segments. Features of Marketing Segmentation Segmentation means dividing total market. Objectives of segmentation. Facilitates sales promotion. Desegregating process. Facilitates combination of 4Ps. Operates as promising marketing strategy. Levels of Market segmentation. Factors influencing marketing segmentation Better marketing performance Appropriate adjustment of marketing mix. Introduction of appropriate distribution strategy Better service to consumers Adjustment with diverse expectations of consumers. Suitable designing of products. Appropriate price fixation Timing of marketing/advertising/sales promotion efforts. Facilitates appropriate marketing programmes. Objectives of segmentation To select most suitable market segment. To promote sales. To make the marketing activity consumer- oriented. To find out new convenient and promising markets. To study purchase potential of buyers. Bases of Marketing Segmentation (Consumer Market) Geographic Segmentation Demographic Segmentation Socio-economic Segmentation Psychographic Segmentation Behaviouristic Segmentation Segementation as per marketing conditions. Segementation as per volume of Purchase. Bases of Segmentation (Industrial Goods Market) Segmentation as per the features of the buyers i.e. industrial users. Segmentation as per the type of organization. Segmentation as per the Geographic location of the purchasers. Segmentation as per buying capacities of customers i.e. industrial users. Features of a good Segment Easily measurable Easily accessible Viable segment Economic ability to buy Adequately profitable Promising demand Homogeneous Availability of data character Positive response Steps in Segmentation Survey of existing market. Scrutiny of market information. Cluster profiling Selection of promising segment Finalizing appropriate marketing mix Advantages of Market Segmentation Facilitates customer-oriented marketing Facilitates suitable marketing mix Facilitates effective product strategy Facilitates the selection of promising markets Facilitates exploitation of better marketing opportunities. Facilitates selection of proper marketing programme. Provides proper direction to marketing efforts. Facilitates effective advertising Provides special benefits to small firms. Facilitates optimum use of resources Limitations of Market Segmentation Too much concentration on few segments is dangerous. Rational segmentation is difficult. Excessive segmentation leads to fragmentation. Expensive exercise. Limited contribution in solving marketing problems Consumer behaviour is unpredictable. Difficult to introduce. Miscellaneous limitations of market segmentation. Inadequate market information & data. Defective/Deceptive variables. Changing marketing environment. Conservative managements.
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